U.S. jobs becoming a foreign concept

If you’ve heard it once, you’ve heard it a thousand times: Government doesn’t create jobs, private industry creates jobs. Now comes evidence of the truth of that unctuous utterance — though perhaps not quite as its Grand Old Partisans intended.

A recent study disclosed that U.S. multinationals did indeed add 2.4 million workers in the decade from 2000 to 2009. But hold the hurrahs. The jobs were overseas. At the same time, these goliaths cut 2.9 million jobs here.

“A lie!” you exclaim, “another left-wing lie!” Thanks for thinking of me, but I have to decline the honor. The figures come from the Wall Street Journal, not exactly a champion of hard-pressed labor.

It’s a sensitive subject in American boardrooms, as you’ll find if you search the web. It’s chock-full of articles from business-booster organizations (the Business Roundtable and the like) defending the transfer of jobs.

There are lots of statistics in these articles and they’re impressive. But, they’re also more confusing than enlightening — which is maybe the whole idea. And it really doesn’t work.

Any American worker who’s been awake the past 10 years has seen the steady drift of jobs overseas — or has even been required to train foreign replacements. You know it because you’ve seen it with your own eyes.

But the business apologists pose this question for us laymen: “Who do you believe? The experts or your lying eyes?” In this instance, workers who believe our multinational moguls are, in fact, shipping their jobs overseas have 20/20 eyesight.

In fairness, it should be pointed out that not all or most of these overseas jobs would have been created here. The developing countries offer multinationals not only new markets but, equally important, cheap labor, as low as 81 cents an hour in parts of China. And corporations are entitled — even obliged by fundamentalist free-market logic — to maximize profits.

But that’s only part of the story. It turns out that U.S. taxpayers pay for these overseas jobs via a corporation-coddling tax code.

Overseas sales — and the overseas jobs they require — are subsidized through the Export-Import Bank. What’s more, profits piled up abroad by U.S. corporations are not subject to U.S. taxes unless they’re brought home — which explains why they rarely are. In addition, taxes paid by U.S. multinationals to foreign governments can be used as a credit against American tax obligations, sometimes producing substantial refunds.

How’s that for a “heads I win, tales you lose” deal?

It’s not chump change either. According to a study by the Congressional Joint Committee on Taxation, tax filings by just six U.S. multinationals pointed conservatively to a loss of $60 billion in annual tax revenue — or more like $100 billion by some estimates.

GE is only one of many multinationals enjoying a sweetheart tax deal. But, by all accounts, it’s done better than most. Last year, it paid no taxes on $14.2 billion in profits while claiming a tax benefit of $3.2 billion. And what about jobs? A majority of GE employees work overseas; indeed, since 2002, the company has eliminated a fifth of its American work force.

Before you beat up on GE, however, ponder this: It’s all perfectly legal. Indeed, GE emphasizes it “has paid what it owes under the current law.” And therein lies the problem — not so much with GE but with a cash-corrupted political system in which Congress allows big corporations with deep pockets, huge legal staffs and lobbyists to write tax law.

With the federal government hard up for cash, multinationals have a new trick up the corporate sleeve — a tax “holiday” allowing foreign profits to be repatriated at sharply lower rates and producing, they say, investment and more U.S. jobs. It sounds too good to be true — and it is, if history is any guide.

A similar “holiday” in 2004 produced little investment and few jobs, but yielded a bonanza in dividends and bonuses for the boys in the boardroom. Think another “holiday” would be any different?

John Farmer is a Star-Ledger columnist. Share your thoughts at njvoices.com.